Legislature(1993 - 1994)
04/12/1994 09:02 AM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS April 12, 1994 9:02 a.m. MEMBERS PRESENT Senator Randy Phillips, Chairman Senator Robin Taylor, Vice Chairman Senator Loren Leman Senator Al Adams Senator Fred Zharoff MEMBERS ABSENT All Members Present COMMITTEE CALENDAR SENATE BILL NO. 372 "An Act relating to community local options for control of alcoholic beverages; relating to the control of alcoholic beverages; relating to the definition of `alcoholic beverage'; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 372 - No previous action to record. WITNESS REGISTER Teresa Williams, Assistant Attorney General Department of Law 1032 W. 4th, Suite 200 Anchorage, AK 99501-1994 POSITION STATEMENT: Offered information on SB 372 Pat Sharrock, Director Alcoholic Beverage Control Board 550 W. 7th, Suite 350 Anchorage, AK 99501-3510 POSITION STATEMENT: Offered information in support of SB 372 Jack Pearson, City Manager City of Ketchikan 334 Front St. Ketchikan, AK 99901 POSITION STATEMENT: Voiced support for SB 372 Cheri Davis P.O. Box 5723 Ketchikan, AK 99901 POSITION STATEMENT: Testified on SB 372 ACTION NARRATIVE TAPE 94-27, SIDE A Number 001 The Senate Community & Regional Affairs Committee was called to order by Chairman Randy Phillips at 9:02 a.m. He introduced SB 372 2 (ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.) as the only order of business. TERESA WILLIAMS, Assistant Attorney General, Department of Law, testifying via the teleconference network from Anchorage, explained that the current local option law is very complicated and sometimes unworkable to achieve the outcome that a community wishes to achieve. The Alcoholic Beverage Control Board and the Department of Community & Regional Affairs have received numerous phone calls requesting assistance, however, on some occasions no assistance can be provided because the language of the statute is so rigid. SB 372 simplifies and reorganizes the current local option law making it more understandable and workable. Ms. Williams outlined some additions to the existing menu of local options that are available. The only material changes to existing options are: (1) to allow for a municipal restaurant or eating place license (beer and wine only); (2) to limit the types of licenses that could be available if a community opts to restrict licenses; and (3) to allow communities to opt for sales under a permit issued under AS 04.11.230 by a beverage dispensary licensee who operates a premises outside of the area. Additionally, if the community has placed restrictions on sale, but allows importation, it may designate a delivery site under this section. She explained that communities would be able to allow a beverage dispensary license from outside of the area to use a permit to come within the area. This is something that has been requested by some communities that don't want a bar within the community, but for a special function they would like an operation by permit within their community. There has also been much more flexibility given in drafting the wording of the ballot question, which has been a problem in the past because of the rigid language in the current statute, and a new provision has been added that establishes a procedure that makes it much easier for a community to change from one local option to another. Number 175 PAT SHARROCK, Director, Alcoholic Beverage Control Board, said the board has been trying to propose this legislation for a number of years. Several years ago a bill was introduced in the Senate to try to address the problem, but it did not get out of the House Rules Committee. He complimented Ms. Williams for her hard work in drafting SB 372, which, he said, is an outstanding piece of legislation. Mr. Sharrock said the primary impact of SB 372 is to change the local option provisions to allow communities to more easily select from a menu of options that exist in current law. He noted that over the approximately 14-year period since Title 4 was rewritten, there have been 112 communities that have voted to opt for one of the current option provisions under the law. What has been occurring is that they are trying to make some changes into other areas of local options, and they are finding it very difficult because of the way the question has to be worded under current law and what happens if they do adopt that election. He spoke to a problem the City of St. Mary's has encountered with applying existing statutes to local option election procedures. Mr. Sharrock pointed out that, with one exception, all of the local option provisions in current law are retained in SB 372. The only exception is that it allows a city to adopt a local option to allow for the sale of alcoholic beverages only through a caterer's permit issued to a current bar owner. Mr. Sharrock emphasized the importance of revising the local option provisions in current law. He said they have worked well over the years they have been there, but communities are trying to change those provisions now and they are running into great difficulties. Mr. Sharrock then outlined corrective and technical amendments that appear in Sections 1-4, 6, 12, 15, 26, 42, 43 and 44 of SB 372. Number 380 TERESA WILLIAMS, speaking to the definition of "alcoholic beverage" contained in Section 4, said they are not making hair spray an alcoholic beverage that is controlled under this law. It would only become an alcoholic beverage after it's converted to the beverage where it would be intended by the purchaser or the seller for human consumption. Number 385 SENATOR ZHAROFF noted the bill prohibits a package store from advertising through individual fliers, mailings, etc., but he wondered about a local newspaper. PAT SHARROCK answered that the board doesn't have any regulation or control over that. Number 395 SENATOR RANDY PHILLIPS stated the committee would take testimony from Ketchikan via the teleconference network. JACK PEARSON, City Manager of Ketchikan, stated the city's support for SB 372. Number 400 CHERI DAVIS, Ketchikan, said a creative idea that came out of discussions by the Ketchikan Chamber of Commerce and that might be pursued somewhere down the road is the idea of potentially having a municipality buy all of the liquor licenses in the community and then lease some of them back depending on how many it was felt were in necessary in the community. She asked if that would be possible under either the current law or the legislation being considered. TERESA WILLIAMS answered that under current law a liquor licensed cannot be leased, and she expressed concern with providing that ability. PAT SHARROCK added that Fairbanks formed a whole development corporation that went out and bought licenses and retransferred them to other persons, but he said he doesn't know how successful the effort has been. Also, Kodiak is discussing doing the same thing. Number 425 SENATOR ZHAROFF asked if the Internal Revenue Service can seize a liquor license. TERESA WILLIAMS answered that the IRS did seize a liquor license in Juneau, and the department has been in litigations with the IRS since 1990. They are in front of the U.S. Supreme Court right now on the matter, but she did not want to comment any further on the issue. Number 435 SENATOR TAYLOR asked if the legislation has any fiscal impact. PAT SHARROCK answered that there was a $1,000 fiscal note from the Division of Elections to cover the costs of a by-mail local option election in unincorporated areas. There being no further testimony on SB 372, SENATOR RANDY PHILLIPS asked for the pleasure of the committee. SENATOR ADAMS moved that SB 372 be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting was adjourned at 9:35 a.m.